college financial aid

[Anonymous]

Our 10th grade child has a paid job this summer and will put the earnings in a Roth IRA. He hopes to do the same next summer. He also has some smaller side jobs where he puts those earnings in a regular bank account for his spending. How will this affect us when we apply for college / if we apply for financial aid? Not sure yet how much will be in the Roth IRA - maybe 2-3K total? And maybe 1000 $ in the regular bank account. TIA !

[Anonymous]

Any asset, student or parental, counts against you in most financial aid calculations. They actually disincentivize working and saving, which is crazy,

[Anonymous]

FAFSA does not ask about retirement accounts.
CSS (used by many private schools) does ask for these numbers.
Students are expected to spend down a higher proportion of their assets then parents.

But generally kids who need financial aid for college will need to use their summer earnings for spending money, books, etc. They can't fund an IRA at age 15.

[Anonymous]

Anonymous wrote:FAFSA does not ask about retirement accounts.
CSS (used by many private schools) does ask for these numbers.
Students are expected to spend down a higher proportion of their assets then parents.

But generally kids who need financial aid for college will need to use their summer earnings for spending money, books, etc. They can't fund an IRA at age 15.

^ this- it doesn’t make any sense to ask a university for a handout and then have your kid start funding their retirement from a high school summer job. If you don’t expect aid and are wealthy, you should fund your kids Roth IRA when the amount they earned from their summer job.

[Anonymous]

Anonymous wrote:FAFSA does not ask about retirement accounts.
CSS (used by many private schools) does ask for these numbers.
Students are expected to spend down a higher proportion of their assets then parents.

But generally kids who need financial aid for college will need to use their summer earnings for spending money, books, etc. They can't fund an IRA at age 15.

This. My kid's summer jobs pay for his books and other personal expenses at school. I'm not funding that. He earns around $5k per summer but since we are lower income, I have no idea how much they take his savings into account. What is your HHI?